N.W.T. abandons $1.2B plan to export electricity south

The territorial government is abandoning plans to export electricity to southern Canada.

The proposalinvolved connecting the North and South Slave hydro-electric transmission grids.

Officials completed a business case this year andfound it would cost $1.2 billion, more than double what was initially estimated.

"It's priced itself off our priority list,"says Finance Minister MichaelMiltenberger.

"It's a very good idea and it still makes an enormous amount of sense,because we have water going over the dam, we have hydro capacity at Taltson," he says. "But at $1.2 billion, it's just not economically viable for us so we have to look at a plan B.

Miltenberger says plan B is shifting from transmission to power generation and alternative energies.

The territory has spent $58 million subsidizing diesel fuel in the past few years. Hesays that's not sustainable and they're going to have to find ways to generate cheaper local power, even if it means spending hundreds of millions of dollars up front.

Miltenberger says the focus is now on findingin ways to generate power in the north, which will in turn lead to a lower cost of living.

The Northwest Territories Power Corporationnow powers generators in 20 communities, including Sachs Harbour and FortLiard,with a combination of diesel, natural gas or liquefied natural gas.

"To use biomass, solar, whatever we could do to put together an array of energy that allow us to get off diesel, cut our costs, reduce our carbon footprint, limit our greenhouse gases, it's a perfect time. Technology is moving at light speed. The cost ofsolar is dropping, the capacity is there, the time is right."

Leaders from across the territory will be meeting in Yellowknife next week for a conference about on energy generation.

Miltenberger says he and the premier are still negotiating with the federal government to raise the territory's borrowing limit from $800 million to $1.8 billion in order to pay for big projects that include energy generation.

He says the other benefit of power generation is being able to supply the territory's diamond mines. This also was the impetus behind the proposal to expand theTaltsonHydro Facility and run transmission lines from close to the Alberta border up to the diamond mines.

The territory spent$13 million exploring the expansion project but it didn't move forward because the diamond mines wouldn't sign powerpurchasing agreements.

However, Miltenberger says there's still a market for affordable energyone that could benefitthe territory's economyin the long run.

"The math is very basic. If you spend a few hundred million dollars, and you can sustain or extend mine life. And each mine is $250million a year, roughly. Then it doesn't take long to pay back that kind of investment."